updated 06:15 pm EDT, Mon April 9, 2012

Quarter of manufacturing costs on components

The Wii U is rumored to cost Nintendo $180 per unit to manufacture, according to sources of Forget the Box. Component costs are expected to be $50 of that total. "Cutting production costs to maximize profits is Nintendo's main concern with the Wii U," the sources claimed.

The NFC (Near Field Communication) components were tentatively priced at $5 and are expected to fall to below $1 as it becomes more mainstream, with the touch screen estimated at $14 and the cameras at $6 each. In comparison, the 3DS had a parts cost of $100 after a physical breakdown by the IHS iSuppli Teardown Analysis Service last year. The Kinect had cost Microsoft $56 per unit, as deduced by UBM Tech Insights in 2010.

The alleged $180 cost does not take into account costs incurred outside of manufacturing, such as development, shipping and packaging. The expected retail price of at least $300 also does not mean Nintendo would be earning a profit of $120 per console, as the retailer's profit margin and state taxes can take up a large percentage of that figure.